The era of MP3s, walkmans, and CDs is long over, are considered to many as, at most, collectable items. We have entered into one of the finest hours – music streaming apps. They are now revolutionizing the industry and transforming consumer habits on a global scale.
The reason for this is straightforward. Music apps like Spotify provide convenience people have never known before. They are easily accessible (right from any smartphone), affordable, and have nearly any song right at your fingertips.
The audience of such apps is growing every hour, so no wonder that lots of entrepreneurs consider joining the market with their own startups. What they don’t think of is the number of nuances and challenges in this niche. We are here to take you behind the scene.
Creating a music streaming app is possible when you know the market, have considered various avenues, and understand the essential features of an MVP. We’re covering all of it and even more in this article.
What you should know about the music streaming app market
How many people use some kind of music streaming app on their smartphones or laptops? The answer is obvious – a lot, but let’s look at the facts provided by Grand View Research.
The world music streaming market was $24.4 billion in 2020. This number will only continue to grow and won’t be affected by the pandemic crisis. In fact, lockdowns in many countries even increased the number of users.
For example, the music subscription revenue in China grew by 70% in the first quarter of 2020 compared to the same period in 2019.
By 2027, the global market’s revenue is expected to grow up to $76.9 billion. The CAGR index (2020-2027) is 17.8%.
Predictably, the growing number of smartphones and the appearance of new market players positively impact market development.
But before we take a look at the key market players, let’s learn more about the types of music streaming apps:
- Cloud storage. Users store their music in the cloud (so as not to use up the storage on their device). So this library is limited to the user’s personal preferences.
Examples: pCloud, CloudBeats, Sync.com, etc.
- Radio stations. These apps work as an advanced radio in your smartphone. They give users access to numerous radio stations and playlists for different moods and situations.
Examples: iHeartRadio, myTunerRadio, SiriusXM, etc.
- Music library. And that’s the category we’re interested in today, and is also referred to as music streaming apps. Users can find nearly any song they like in the database and create mini-libraries based on their preferences.
Examples: Spotify, Pandora, Amazon Music, etc.
What does this market look like today? We turned to the MIDiA Research report to learn more about the strongest market players.
These companies form the market as we know it. They dictate trends and transform the music industry in general.
5 market leaders in the music streaming niche
Spotify
It’s like a legend among other streaming solutions. The distinguishing feature of this app is free ad-based access without a subscription. At the same time, premium subscription options include standard, student, and family plans.
Users can also enjoy podcasts, video streaming, and even lossless quality options (users will have the chance to enjoy all the subtle audio details they may have missed in their favorite recordings. This was announced in February 2021 but hasn’t been released yet). The app has both mobile (iOS, Android) and desktop versions.
Apple Music
As the name suggests, this app was initially created for Apple devices. In addition to the music library, the solution offers its own radio and can be used in the browser without installing an app. All subscription plans are payable, and the standard one costs $10 (like Spotify).
In 2015, Apple officially launched its music app for Android devices and broadened the company’s market presence.
Amazon Music
It is a great option for those who use Amazon in their routine daily. Having an Amazon Prime account, users pay $8 monthly for the music streaming service. There are no additional features available, but the app works perfectly on iOS and Android software and offers HD music sound for an extra fee.
Tencent Music
It’s a hugely popular music entertainment platform in China, and music streaming is only a part of it. It looks more like a music-centric application with numerous features for higher user engagement. People can listen to music, sing karaoke, watch live performances, and socialize – all of it with one application.
Google (YouTube) Music
Previously known as Google Music, now the two products are merging into one. The app is available for all devices and has a free version to offer. Possible improvements include integration with voice assistants and an HD-quality option.
Know before you go: 5 points to evaluate before development starts
Now we’re moving further and reviewing some common traits of all music streaming applications. These are the things to consider if you decide to invest your effort into the development stage.
License
Users don’t buy content on the platform – the purchase only the ability to listen to it, and you are responsible for the license that allows them to do so. This is the starting point before you take any further steps.
Why is it mandatory? The answer is simple: you’ll get a fine for every song played without a license, and the sum varies between $750 and $150 000.
Now, where do you get a license for your app?
These are the important links for the US market:
- ASCAP Music License Agreements & Reporting Forms
- BMI Music Licenses for Business Establishments
- GMR Music Licensing FAQ
If you set up a business in Europe, you can get a license covering the EU countries on the ICE website.
Platform
Now you should decide on the platform where your streaming app will be made available. Aiming for both iOS and Android seems the most reasonable decision, but you should review your budget at this moment.
If it’s limited, think about your target market. It is well-known that US users prefer Apple devices, while other world regions use an Android smartphone for the most part. Here are a recent market share overview and separate reports for the US and European markets.
Design
Music streaming is a daily tool of modern listeners, so design plays a crucial part in the whole process. If you have in mind a Spotify-like app, consider design very carefully – it should be engaging and easy to understand.
Read also: How to Create a Great User Experience: Fresh App Personalization Ideas for any Industry
You should have top-notch experts by your side who can identify even the tiniest shortcomings in Spotify’s workflow to in order to make them an advantage of your app.
And it is important to thoroughly work out every step of the design process: wireframes, mockups, and prototypes. When it comes to usability, every minute is worth spending on it, so don’t hurry.
Data storage
Data storage is a fundamental part of your future music library, and you should know your options:
- backend server for streaming,
- taking songs from available catalogs with attention to the terms of services, and
- your own data storage to upload all the songs there.
Tech stack
It’s basically a list of tools to use in music application development, and you won’t manage it by yourself. These are only several items you have to decide on with professional developers.
How to create an app like Spotify? The list of essential and optional features
What makes an outstanding music streaming app? It’s a list of vital features that underpin a digital product plus several good-to-have options that you can defer for the future.
Essential features
- Sign up (account creation). The fastest way to sign up is via existing social media accounts like Facebook. Make it available along with the standard email-based account creation.
- In-app search. Pay close attention to this feature: include filters (artists, songs, albums, genres, record labels, etc.), autosuggestion, and even album (single) covers next to the suggestion (like Spotify does).
- Audio streaming. It’s the very core of your app, so the music player should be quick and intuitive. Make sure all navigation buttons are easily accessible (play, rewind, fast forward, playlist, queue, etc.).
- Personal music organization. Users should have personal libraries to create playlists of any kind and add songs and albums to the favorites.
- AI functionality. It might be not obvious, but AI-based recommendations bring your app to a whole new level. People are ready to come back again and discover new artists… If you help them. Machine learning makes your app engaging and even addicting in the best possible way.
- Subscriptions to artists. In case the user’s favorite artist uploads an update, the user can get a notification about it. For example, Spotify sends personalized letters about new music via emails and presents new content in a special playlist (“Release Radar”).
- Offline mode (music download). It’s a backup plan if the user’s device doesn’t have Internet connection at a particular moment. The app caches audio data on the user’s device and saves the day for a music lover. For example, Spotify premium users can download their playlists from the app to play them offline.
- Sharing via messages / social media. In case users like a song and want to share it with the world, your app should help them do it. Starting simple from generating a link and sharing via Facebook or WhatsApp, you should include more messenger apps and social media with time.
- Push notifications. There are true music fans among your potential customers who should be notified about new releases in the music world if they want to. Give them an opportunity to get the news first (this feature should be easily turned off in the settings).
Optional features
- Sound quality variations. Some music apps offer lossless quality, in other words, an audio enhancement feature. This feature is not crucial – even some leaders have chosen not to provide it (at least not yet). But it can be an advantage if you want to develop an app like Spotify.
- Uploading music. Allow users to sync their music libraries (local music files) with your app. Make sure to include the most popular file formats (mp3, m4p, mp4) and consider adding the m4a (lossless) format in the near future.
- Event calendar. If you inform users about upcoming music events, you are giving them one more reason to return to your music application. You don’t only inform users about new music but also tell them where they can go to listen to its live version.
- Chat. And finally, let people discuss what they listen to daily. Integrating a chat feature allows users to share their preferences and opinions with others. It means your app becomes a complex platform for everyone who listens to music.
And one important part of the whole feature set is the admin panel. No app can exist without it, and a Spotify alternative is not an exception. Here you can manage every corner of the platform: users, subscriptions, music storage, and many other things.
How to make money with music? The two monetization models of your future app
After taking care of the music content on your platform, pick one of these models (we recommend implementing a combination of them).
- Ads-based
It can be simply adding ads here and there in the app’s interface and between the songs. Spotify created a handy self-served tool for businesses, so entrepreneurs and marketers could choose where to add the ads and monitor its success afterward.
- Subscription
It’s the most popular and even traditional way to monetize a streaming platform. Users pay a certain amount of money monthly on an auto-renewal basis. For this, they get unlimited access to the platform’s features and content. You can add extra functionality to make it a matter of choice for listeners and earn more money with it.
Read also: How to Monetize an App: A Comprehensive Guide to the Best App Monetization Strategies
The music streaming revolution: Why does everyone aim for Spotify’s success?
The question of how to build an app like Spotify is not just some popular trend in the business world. You saw it yourself at the beginning of the article: Spotify has 32% of the global market. What else stands behind this number?
Here is some stats from the fourth quarter of 2020:
- 345 million monthly active users (with 155 million premium subscribers);
- €2.168 million of total revenue; and
- €74 million of free cash flow.
These numbers look more than convincing for many ambitious projects across the globe. We should look at this phenomenon more closely.
The key idea behind Spotify is personal recommendations. Users return to this app because it gives hints on what to listen to next.
The recommendations playlist may consist of:
- brand new songs in the industry,
- something that users already listened to several times, and
- songs similar to the ones from existing playlists.
It means that any time a user decides to use the app, they will inevitably find something new to enjoy. As a result, it creates a very engaging experience in the industry like Netflix in video streaming.
How does it work?
Like or dislike. Users can add a song to favorites and “thumb it up” or down. In any case, it sends signals to the machine learning algorithms. The app has a storage with the user’s music preferences: genres, artists, albums, etc.
Listening behavior. The app will notice if a person skipped a song or, on the contrary, listened to it till the very end.
Therefore, keep in mind the two main investments in the Spotify alternative: the space to store the preferences data and regular AI improvements to the app.
In conclusion
Nobody said it would be easy: creating a music streaming app is a challenging initiative. But it’s worth trying no matter what. People won’t stop loving music any time soon, and there are still lots of unfulfilled ideas in the music streaming services.
First and foremost, a crystal clear user experience and AI recommendations are paramount. These features are the fundamental ingredients for success. Then spice things up with something special like an event calendar or in-app messaging capabilities.
Give users a reason to stay with your app longer – provide the quality they haven’t seen yet.
The Eastern Peak team will gladly help you come up with the essential tech stack and list of features for your music app. Drop us a line, and let’s start traveling this route together.
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About the author:
Alexey Shalimov, CEO at Eastern Peak
As CEO at Eastern Peak, a professional software consulting and development company, Alexey ensures top quality and cost-effective services to clients from all over the world. Alexey is also a founder and technology evangelist at several technology companies. Previously, as a CEO of the Gett (GetTaxi) technology company, Alexey was in charge of developing the revolutionary Gett service from ground up and deploying the operation across the globe from New York to London and Tel Aviv.
